Correlation Between CONAGRA FOODS and Mitsubishi Electric
Can any of the company-specific risk be diversified away by investing in both CONAGRA FOODS and Mitsubishi Electric at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining CONAGRA FOODS and Mitsubishi Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CONAGRA FOODS and Mitsubishi Electric, you can compare the effects of market volatilities on CONAGRA FOODS and Mitsubishi Electric and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in CONAGRA FOODS with a short position of Mitsubishi Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of CONAGRA FOODS and Mitsubishi Electric.
Diversification Opportunities for CONAGRA FOODS and Mitsubishi Electric
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CONAGRA and Mitsubishi is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding CONAGRA FOODS and Mitsubishi Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsubishi Electric and CONAGRA FOODS is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on CONAGRA FOODS are associated (or correlated) with Mitsubishi Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsubishi Electric has no effect on the direction of CONAGRA FOODS i.e., CONAGRA FOODS and Mitsubishi Electric go up and down completely randomly.
Pair Corralation between CONAGRA FOODS and Mitsubishi Electric
Assuming the 90 days trading horizon CONAGRA FOODS is expected to under-perform the Mitsubishi Electric. But the stock apears to be less risky and, when comparing its historical volatility, CONAGRA FOODS is 1.82 times less risky than Mitsubishi Electric. The stock trades about -0.07 of its potential returns per unit of risk. The Mitsubishi Electric is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,500 in Mitsubishi Electric on September 1, 2024 and sell it today you would earn a total of 82.00 from holding Mitsubishi Electric or generate 5.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
CONAGRA FOODS vs. Mitsubishi Electric
Performance |
| Timeline |
| CONAGRA FOODS |
| Mitsubishi Electric |
CONAGRA FOODS and Mitsubishi Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CONAGRA FOODS and Mitsubishi Electric
The main advantage of trading using opposite CONAGRA FOODS and Mitsubishi Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CONAGRA FOODS position performs unexpectedly, Mitsubishi Electric can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Mitsubishi Electric will offset losses from the drop in Mitsubishi Electric's long position.| CONAGRA FOODS vs. SIVERS SEMICONDUCTORS AB | CONAGRA FOODS vs. Darden Restaurants | CONAGRA FOODS vs. Reliance Steel Aluminum | CONAGRA FOODS vs. Q2M Managementberatung AG |
| Mitsubishi Electric vs. Verizon Communications | Mitsubishi Electric vs. Highlight Communications AG | Mitsubishi Electric vs. WillScot Mobile Mini | Mitsubishi Electric vs. HF SINCLAIR P |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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